Data Table 1 Month Ended August 31, 2018 Net Sales Revenue $ 128,000 Variable Costs: Cost of Goods Sold Selling Costs Administrative Costs $ 32,300 17,300 1600 51,200 Contribution Margin 76,800 Fixed Costs: Selling Costs 37,800 12,600 50,400 Administrative Costs $ 26,400 Operating Income 1. 2. Calculate the weighted-average contribution margin Determine Creative's monthly breakeven point in dozens of plain donuts and custard-filled donuts. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of costs: variable and fixed 3. Compute Creative's margin of safety in dollars for August 2018 4. Compute the degree of operating leverage for Creative Donuts. Estimate the new operating income if total sales increase by 20%. (Round the degree of operating leverage to four decimal places and the final answer to the nearest dollar. Assume the sales mix remains unchanged.) Prove your answer to Requirement 4 by preparing a contribution margin income statement with a 20% increase in total sales. (The sales mix remains unchanged.) 5. The contribution margin income statement of Creative Donuts for August 2018 follows: Creative sells five dozen plain donuts for every dozen custard-filled donuts. A dozen plain donuts sells for $4.00, with total variable cost of $1.60 per dozen. A dozen custard-filled donuts sells for $8.00, with total variable cost of $3.20 per dozen EB (Click the icon to view the contribution margin income statement.) Read the requirements Requirement 1. Calculate the weighted-average contribution margin. (Round all currency amounts to the nearest cent.) Plain Filled Total Contribution margin Weighted-average contribution margin per unit Requirement 2. Determine Creative's monthly breakeven point in dozens of plain donuts and custard-filled donuts. Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of costs: variable and fixed. We'll begin with the breakeven point. Start by selecting the formula and entering the amounts to compute the breakeven point in units for the "package" of products total dozens of donuts to be sold. (Complete all answer boxes. Enter a "o for any zero balances. Enter currency amounts to the nearest cent. Abbreviation used: Weighted-avg. CM weighted-average contribution margin.) Required sales in units - Determine Creative's monthly breakeven point in dozens of plain donuts and custard-filled donuts. The breakeven point is dozen plain donuts and dozen custard-filled donuts Prove your answer by preparing a summary contribution margin income statement at the breakeven level of sales. Show only two categories of costs: variable and fixed. (Enter a "O" for any zero balances.) Creative Donuts Contribution Margin Income Statement Plain Filled Total Net Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income Requirement 3. Compute Creative's margin of safety in dollars for August 2018. Margin of safety in dollars Requirement 4. Compute the degree of operating leverage for Creative Donuts. Estimate the new operating income if total sales increase by 20%. (Round the degree of operating leverage to four decimal places and the final answer to the nearest dollar. Assume the sales mix remains unchanged.) Begin by computing the degree of operating leverage for Creative Donuts. (Round the degree of operating leverage to four decimal places, X.Xxxx.) Degree of operating leverage Estimate the new operating income if total sales increase by 20%. (Round interim calculations to four decimal places and your final answer to the nearest dollar Assume the sales mix remains unchanged.) The estimated operating income will be $ Requirement 5. Prove your answer to Requirement 4 by preparing a contribution margin income statement with a 20% increase in total sales. (The sales mix remains unchanged.) Creative Donuts Contribution Margin Income Statement Month Ended August 31, 2018 Net Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income
